Jackson City Council to consider suing Siemens

Jackson could soon the join the myriad of other cities that have sued Siemens following complications with a water system overhaul.

On Tuesday, the council could decide whether to hire law firm Gibbs and Travis to file lawsuit against Siemens USA to recoup damages associated with its $91 million energy performance contract.

The meeting is slated for 6 p.m., on February 19 at Jackson City Hall. The traditional council work session was not held Monday becuase of the Presidents' Day holiday.

The city brought on the firm in 2012 to do a complete overhaul of the city’s water system. The contract was problematic from the beginning, and last year, Public Works had to bring the firm back on to help work out kinks in the water billing system.

According to the agenda packet, “it is in the best interest of citizens of the city of Jackson that the funds expended for water meters and the failure of costs savings promised by Siemens have resulted in the loss of financial stability for the water department.”

City documents go on to say that the Siemens contact has been a “detriment” to the city budget, taxpayers and water customers.

Last spring, months after Siemens had wrapped up work on the contract, city officials told the council that at least 15,000 customers were not receiving water bills, a number that was eventually revised up to around 23,000.

Siemens was brought back on for more than a million dollars to help address those accounts.

Also, as a result of down collections in the water department, Moody’s downgraded the city’s water bond rating. A lower rating could make it harder for the city to issue future bonds for water/sewer projects.

The agenda packet did not include how much the city hoped to recoup in damages.

Siemens has faced similar suits in other cities. In 2016, Monticello, Ark., settled a suit with the firm over a similar water contract, and in 2012, McComb also settled with the organization after complications arose from a water contract there.

Jackson brought on the international firm in 2012. Under terms of its agreement, Siemens would replace some 65,000 water meters, replace broken sewer mains, and create and install new software in the water/sewer billing department.

Former Mayor Harvey Johnson touted the contract as “revenue neutral” and that it would pay for itself over time.

However, a report from a private consultant revealed that savings generated would come off the backs of ratepayers and in the reduction of staff.